BHI: US rig count down 3, ending 3 straight weeks of gains

Upward movement in the US rig count halted for the week ended June 27, declining 3 units to 421 rigs working, indicates the latest data from Baker Hughes Inc. The overall count was weighed down by a 7-unit drop in oil-directed rigs.

The count had risen during the previous 3 weeks, gaining 20 units after 41 straight weeks in which the count either fell or remained static (OGJ Online, June 17, 2016). Since the overall drilling dive commenced following the week ended Dec. 5, 2014, the count has fallen 1,499 units.

Meanwhile, the US Energy Information Administration this week reported that US crude oil production during the week ended June 17 dropped 39,000 b/d to 8.677 million b/d, a decline of 927,000 b/d year-over-year.

Rystad Energy said it expects US unconventional oil well completions to outpace drilling activity during the second half, resulting in 800 fewer drilled but uncompleted (DUC) horizontal wells (OGJ Online, June 23, 2016).

Those completions by Dec. 31 are expected to bring online an additional 300,000-350,000 b/d, more than sufficient to balance the base production decline, the firm indicated.

Oil, onshore rigs resume declines

Active US oil-directed rigs now total 330, down 1,279 units since a peak in BHI data on Oct. 10, 2014. The impact of that loss on the overall rig count was lessened by a 4-unit rise in gas-directed rigs to 90.

Land-based rigs edged down a unit to 397, down 427 year-over-year. Rigs engaged in horizontal drilling also dropped a unit, settling at an active total of 325, down 1,047 units since a peak in BHI data on Nov. 21, 2014. Directional drilling rigs lost 2 units to 43.

The tally of rigs drilling in inland waters decreased 2 units to 3. The overall US offshore count was unchanged at 21, with a unit starting work off Alaska canceling out a unit shutting down off Louisiana.

Drilling activity in Canada, meanwhile, continued to ramp up during the week. The country’s overall count gained 7 units to 76 rigs working, buoyed by an 8-unit jump in oil-directed rigs to 36. Gas-directed rigs edged down a unit to 39.

Oil-directed rigs in Canada have nearly tripled since the beginning of the month.

Louisiana, Oklahoma anchor losses

Among the major oil- and gas-producing states, Louisiana took the largest share of losses this week with a 5-unit decline to 41, reflecting downward movement offshore and in inland waters.

The next largest drop came in Oklahoma, which fell 4 units to 54, down 155 units compared with its total when it entered 2015 and its lowest level in BHI data dating back to January 2000. The Cana Woodford lost 3 units to 24, while the Ardmore Woodford’s only active unit went offline.

West Virginia was the only other state to record a loss, dropping a unit to 11. The Marcellus also fell a unit, settling at 23.

Colorado and Alaska reflecting its offshore gain each increased a unit to 17 and 9, respectively. North Dakota and the Williston were up 2 units to 26.

With a 3-unit rise this week to 194, Texas increased for the fourth straight week, during which time it has added 21 units. The Permian increased 4 units to 150, up 16 since May 13. The Haynesville rose 2 units to 19. The Granite Wash edged up a unit to 8.

Contact Matt Zborowski at matthewz@ogjonline.com.

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